IT Innovation Pressures Grow for CIOs

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More than half of business executives recently surveyed said the organization rates as "poor" or it is "just making progress” with innovation in IT.

These days, virtually no corner of the enterprise remains untouched by IT. From customer-facing Websites and brick-and-mortar storefronts to mobile apps and clouds, IT—and how well an organization puts it to work—separates the leaders from the laggards. A new report from the Business Performance Innovation (BPI) Network, Accelerating Business Transformation through IT Innovation, offers insights into this rapidly evolving space.

Among the key findings: nearly 70 percent of global managers surveyed by the BPI Network believe technology has become "far more important" to their business. However, transforming the concept into reality is a problem. Less than half (47 percent) of the 250 executives polled rate the level of innovation within their IT groups as "good" or "very high," while 52 percent feel the organization rates "poor" or it is "just making progress." In addition, only 42 percent believe their IT groups are doing a good job of becoming a more strategic, responsive and valued business partner.

"Business managers today are frustrated with the sluggish pace of innovation coming from their IT staffs," said Tom Murphy, editorial director for BPI Network. "They believe new business-oriented metrics should be used to measure IT performance." This translates into a new scorecard for the IT organization. "They want to see new ideas for value creation coming from IT. They want faster and cheaper development of applications. And some want to see the same metrics applied to both IT and the business teams."

The report identified a second major issue: "Business leaders are very sophisticated in their understanding of new hybrid IT technologies, including advanced data center systems and the use of the cloud for app development, data processing, disaster recovery and secure data storage, Murphy noted. "They know the capabilities, they see competitors benefiting from them, and they want their own IT groups to provide new and innovative tools in days and weeks, rather than months or years."

Navigating the boundaries between business and IT is critical. CIOs recognize the need to work with business leaders to develop a common language and collaborate on developing and meeting the same metrics, the report found. However, leaders, including CTOs, who resist these changes will run into more resistance from the CEO and CFO as they seek funds for traditional IT approaches, Murphy said. The report also found that there's a growing emphasis on funding shifting from long-term CapEx budgets to more flexible OpEx budgets as organizations move from costly, on-premises data centers to cloud-based business models that are funded on an as-needed basis.

"Instead of asking for millions of dollars to build a data center that will support the organization for a decade, business leaders are more likely to use credit cards to add services needed in the short-term, such as when they need extra capacity during the peak sales seasons," Murphy said.

The report recommends that CIOs focus on six core issues that define today's hybrid IT: design an architecture that provides consistency across on-premises and off-premises environments; understand whether applications belong in an enterprise data center or the cloud; develop a more holistic view of data; Implement automation and management using managed services; better understanding IT consumption models; and adjust and adapt security to fit a hybrid model.

"CIOs should work closely with their peers to manage the organizational change,” Murphy said. "They should be prepared to work toward this goal in small steps, which will show progress and build buy-in across the organization."